June 18 (Bloomberg) -- The Ibovespa climbed for the first
time in three sessions as higher pulp prices boosted Brazilian
producers including Suzano Papel & Celulose SA, outweighing
losses by homebuilders.

The Ibovespa added 0.8 percent to 49,464.94 at the close of
trading. The real weakened 0.5 percent to 2.1816 per dollar at
5:48 p.m. in Sao Paulo even after the central bank intervened to
strengthen the currency. Average pulp prices reached $820.91 per
ton in the week ended June 18, the highest since the end of
August 2011, according to Helsinki-based FOEX Indexes Ltd.’s
BHKP global pulp price index.

“The outlook for pulp prices is positive,” Pedro Galdi,
the chief strategist at Sao Paulo-based brokerage SLW Corretora,
said in a phone interview. “And exporters such as Suzano
benefit from a weaker real, so investors are also taking that
into account now.”

The Ibovespa dropped as much as 1.4 percent earlier today
after the Getulio Vargas Foundation reported that the IGP-M
price index of wholesale, construction and consumer prices
increased 0.74 percent in the 20 days starting May 21. That was
more than the median forecast of 0.65 percent among economists
surveyed by Bloomberg.

MRV, Rossi

“There seem to be too many imbalances in the Brazilian
economy, with high inflation, slow growth and a weak currency,”
Luciano Rostagno, the chief strategist at Banco WestLB do Brasil
SA, said by phone from Sao Paulo. “It’s driving people away
from equities.”

Votorantim Cimentos SA, Brazil’s biggest cement producer,
suspended an initial public offering of as much as $3.7 billion,
according to two people familiar with the decision who asked not
to be named because the decision hasn’t been officially
announced yet. The company was scheduled to price the shares on
June 20.

Votorantim’s IPO is the first to be postponed or canceled
in the world’s second-largest emerging market this year. Its
press office in Sao Paulo declined to comment.

Bear Market

Brazil’s benchmark equity gauge plunged into a bear market
last week after falling more than 20 percent from this year’s
peak in January on concern that accelerating inflation will
limit the central bank’s ability to spur growth.

The Ibovespa trades at 11.9 times analysts’ earnings
estimates for the next four quarters, compared with a multiple
of 10.2 for the MSCI Emerging Markets Index of 21 developing
nations’ equities.

Trading volume for stocks in Sao Paulo was 6.76 billion
reais today, according to data compiled by Bloomberg. That
compares with a daily average of 7.85 billion reais this year
through June 14, according to data from the exchange.